Levesque v. Gov't Emps. Ins. Co.

• Decision Date: 05 May 2022
• Docket Number: 21-12257
• Parties: DEIRDRE LEVESQUE, TIMOTHY LEVESQUE, Plaintiffs-Appellees, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

DEIRDRE LEVESQUE, TIMOTHY LEVESQUE, Plaintiffs-Appellees, v. GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant-Appellant.

No. 21-12257

United States Court of Appeals, Eleventh Circuit

May 5, 2022

DO NOT PUBLISH

Appeal from the United States District Court for the Southern District of Florida D.C. Docket No. 2:15-cv-14005-KAM Before William Pryor, Chief Judge, Rosenbaum, and Brasher, Circuit Judges.

OPINION

PER CURIAM.

This is a diversity case in which Government Employees Insurance Company ("GEICO") appeals from the district court's calculation of attorney's fees as damages. Because we agree with GEICO that the district court improperly calculated the damages award, we vacate and remand.

BACKGROUND

We have previously detailed the factual background of this case the first time it came before us. See Levesque v. Gov't Emps. Ins. Co., 817 Fed.Appx. 670 (11th Cir. 2020) ("Levesque I"). For convenience, we summarize it again here.

In August 2011, Deirdre Levesque was injured while working as a receptionist at an animal hospital. She was crouched down inside a client's open car door when another client backed her car into the door, pinning Levesque. As a result of the accident, Levesque suffered a fractured clavicle and scapula, a fractured and rotated sternum, a punctured lung and fractured ribs.

At the time of the accident, Levesque and her husband had non-stacking uninsured motorist ("UM") coverage from GEICO. When Levesque contacted GEICO to tell it that she would likely make a claim on her UM policy, it delayed its investigation into the exact scope of Levesque's injuries and instead spent the next several months focused mainly on Levesque's ability to recover from other sources. After GEICO learned that another insurer had agreed to pay Levesque, it immediately wrote to Levesque, stating that "it appears that you have been fairly compensated" and asking Levesque to "advise if you are seeking uninsured motorist coverage from GEICO."

The Levesques sued GEICO in Florida state court seeking to require GEICO to tender its policy. After almost two years of litigation, GEICO decided to "confess judgment." So the court entered judgment for the Levesques for the $100 000 policy limit.

In that case ("UM Case"), the Levesques had agreed with their attorneys to a contingency-fee agreement with an "alternative fee recovery clause." An alternative fee recovery clause "provides for an attorney's fee of the greater of either (i) a specified fee if the fee is paid by the client, or (ii) a court-awarded reasonable fee if the fee is paid by a third-party pursuant to a fee-shifting provision." First Baptist Church of Cape Coral, Fla., Inc. v. Compass Constr., Inc., 115 So.3d 978, 981 (Fla. 2013). The clause in the Levesques' contract stated,

I hereby agree to pay for the cost of investigation, and should it be necessary to institute suit, court costs and other costs paid on my behalf, but only if a recovery is made on my behalf. As compensation for their services, I agree to pay my said attorneys, or an amount awarded by the Court, whichever is greater:

[Providing for percentage contingencies based on the stage of litigation, including 40% if judgment is entered for less than $1 million]

e) In the event attorney[']s fees are recovered pursuant to any state or federal statute, I agree to pay my attorneys the greater of the statutory fee or contingency fee stated above.

If there is a statute, rule or other authority which entitles the client to recover attorney's fees from a defendant under any circumstances, and the court awards fees, client shall not be limited by this fee agreement in any award of fees by the court, as client agrees to pay attorney a reasonable attorney's fee. Any fee awarded by the court that exceeds the amount of the fee paid by the client under the contingency fee agreement shall become the property of the attorney.

Because the Levesques obtained a judgment against GEICO for $100, 000, they owed their attorneys the greater of 40% of $100, 000 or any attorney's fees awarded by the court. The court did not award any attorney's fees in the UM Case, so under the Levesques' agreement with their counsel, they owed their attorneys $40, 000.

In the meantime, though, the Levesques sued GEICO again, alleging it had acted in bad faith in violation of Florida Statutes § 624.155 ("Bad-faith Case"). In a bad-faith action, the recoverable damages "shall include the total amount of the claimant's damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney's fees and costs, and any damages caused by a violation of a law of this state." Fla. Stat. § 627.727(10) (emphasis added).

The parties stipulated pretrial that the "total amount of damages sustained by Deirdre Levesque and Timothy Levesque as a direct and proximate result of the collision" was a fact to be determined by the jury, while the "amount of any attorney's fees and costs reasonably incurred by the Levesques" was an issue of law reserved for the court.

At trial, the jury found that GEICO had acted in bad faith and awarded the Levesques damages totaling $317, 200. But the district court determined that setoffs from collateral sources of recovery reduced the jury award to $0, and it entered judgment for GEICO. The district court also denied the Levesques' motion for attorney's fees, holding that the amount of attorney's fees expended in the UM Case was an aspect of damages that needed to have been proven and submitted to the jury. The Levesques appealed.

On appeal, a panel of this Court affirmed the reduction of the award to $0 but determined that the district court was wrong to hold that the issue of attorney's fees had to be submitted to the jury. Levesque I, 817 Fed.Appx. at 675. We explained that the pre-trial stipulation allowed the court to determine the attorney's fee award, even when it was an element of damages. Id. at 674. Then we vacated the entry of judgment in GEICO's favor and remanded to allow "the district court [to] determine the amount of any reasonable attorneys' fees the Levesques incurred in [the UM Case]." Id. at 675.

On remand, the Levesques asked the district court to use the lodestar method to calculate the attorney's fees that they incurred in the underlying UM Case and argued that "the amount of attorney's fees is not limited to the contingency fee because the retainer agreement includes an alternative fee recovery clause." GEICO disagreed. It asserted that the Levesques were entitled to an award in only the amount they actually owed to the UM Case attorneys.

The district court agreed with the Levesques. Ultimately, it used the lodestar method to calculate a reasonable attorney's fee award from the UM Case-$94, 542.50 in attorney's fees and $2, 465.54 in costs. GEICO appeals.

STANDARD OF REVIEW

This case requires us to determine the correct construction of the Florida statutes-a question of law we review de novo. Equal Emp. Opportunity Comm'n v. STME, LLC, 938 F.3d 1305, 1313 (11th Cir. 2019).

DISCUSSION

A. The Relevant Florida Statutes

We begin by summarizing the relevant Florida statutes, starting with Fla. Stat. § 627.428. Under that statute generally, an insured who wins a suit against her insurer may recover reasonable attorney's fees. But the general provision for attorney's fees does "not apply to any action brought . . . against the uninsured motorist insurer unless there is a dispute over whether the policy provides coverage for an uninsured motorist proven to be liable for the accident." Fla. Stat. § 627.727(8); see also State Farm Mut. Auto. Ins. Co. v. Petersen, 855 So.2d 1248, 1250 (Fla. 4th DCA 2003).

So but for the disputed-coverage exception, fee-shifting is not statutorily available when an insured successfully sues her UM insurer to obtain benefits under the policy. No one argues that the disputed-coverage exception is implicated here, so in the UM Case, the Levesques had no statutory right to recover their attorney's fees from GEICO.

But as we have noted, if the plaintiff believes that her UM insurer acted in bad faith, she may file a separate lawsuit, as the Levesques did here. See Fla. Stat. § 624.155; Levesque I, 817 Fed.Appx. at 672. And in the second, bad-faith suit, the recoverable damages include attorney's fees and costs expended in the original action:

The damages recoverable from an uninsured motorist carrier in an action brought under s. 624.155 shall include the total amount of the claimant's damages, including the amount in excess of the policy limits, any interest on unpaid benefits, reasonable attorney's fees and costs, and any damages caused by a violation of a law of this state. The total amount of the claimant's damages is recoverable whether caused by an insurer or by a third-party tortfeasor.

Fla. Stat. § 627.727(10) (emphases added).

Section 627.727(10), though, must be read alongside Fla. Stat. § 624.155(8). That provision explains that the "damages recoverable [in a bad-faith action] shall include those damages which are a reasonably foreseeable result of a specified violation of this section by the authorized insurer and may include an award or judgment in an amount that exceeds the policy limits." Id. § 624.155(8).

Another subsection of § 624.155-subsection (4)-provides for fee-shifting in the bad-faith action when the plaintiff is successful. Id. § 624.155(4) ("Upon adverse adjudication at trial or upon appeal, the authorized insurer shall be liable for damages, together with court costs and reasonable attorney's fees incurred by the plaintiff.").

B. Florida law requires the conclusion that the Levesques may recover their attorney's fees from the UM Case only as a part of their damages,...